June 10, 2013

Google Looks To Seal Deal On Waze, Outbidding Apple And Facebook

Several news sources are reporting that Google is almost ready to seal the deal with Waze, purchasing the Israeli mapping app for just over $1 billion.

This isn´t the first time such news has hit the headlines, however. Earlier this year (as recently as last month) rumors began to fly that both Google and Facebook were angling to pick up the app, seemingly to keep the other from buying it.

One inside source told the Wall Street Journal that the Google/Waze deal could be announced this week, closing out several months of talks.

With a price tag of $1.3 billion, it is the fourth largest sum the search company has ever paid to acquire another business, and considering the intense focus on maps by several large companies over the last year, it´s likely money they feel is well spent.

Though several news sources are citing “inside sources,” neither Google nor Waze have commented on these rumors.

Waze is a social mapping app which now boasts nearly 50 million users on iPhone and Android devices. The app gained plenty of attention early by taking a crowdsourced approach to traffic, using each user´s smartphone as a mobile traffic reporter. This data is collected and sent out to other Waze users to give real-time traffic updates. Users can also report trouble spots such as road hazards and speed traps.

Google´s heavy focus on maps and social services makes Waze a very desirable app. Though they´ve already got a widely popular mapping app amongst Android and iOS users alike, they stand to improve some of their features with the addition of Waze.

But according to a report on Time.com, this acquisition is less about improving their own services and more about making sure Apple and Facebook can´t pick up Waze to improve (or build) their mapping offerings.

Apple may have been looking for a way to remove its reliance on Google Maps after its embarrassing map incident last year. The Apple Maps app was criticized heavily following an embracing launch in iOS 6, due to several glitches in the program. But Apple´s new Maps app already has a touch of Waze in it; the social mapping company serves up some of the data to power Apple´s maps. Yet a complete takeover would have both gone a long way to improve Apple´s offering as well as improve the overall reputation of the app.

Facebook doesn´t offer a mapping service, but earlier rumors claimed they were keen on launching one. This made more sense in the peak of the Facebook phone rumors when many believed the social networking site planned to release an actual phone instead of a “suite of apps” for Android. Google´s rumored acquisition of Waze prevents the app from threatening Google´s dominance as well as keep two of their largest competitors from growing large enough to threaten their business.

One analyst who spoke with Bloomberg said this deal is proof of the escalating competition between Google and Facebook, noting that the consumers should ultimately benefit from this fight.

Google could do well to announce this acquisition today or later this week. Apple is holding their developers conference this week in San Francisco, meaning they´ll almost certainly be talking about their Maps app and possible improvements. This announcement could allow Google to wrangle some attention away from the Cupertino-based tech company.